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Managing Money Info
-Financial
Strategies
Dealing with:
-Financial Emergencies
-Money
Issues Children & Credit:
-Allowances
-Teaching
Kids Credit Saving Tips:
-Saving Money
-Savings/Investing Calculator
-Trimming Expenditures
-Cut Grocery Store Costs
Budgeting:
-Why
You Should Budget
-Developing a
Plan
-Mistakes to Avoid
-Money
Spending Challenge
-Avoid
Wasting
General:
-Checking Accounts Money
-Credit Help
-Taxes
-Checking
Accounts
Mortgages
Auto Loans
Personal Loans
Credit Reports
Debt Consolidation
Credit Cards
-Home
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HOW MONEY LEAVES YOUR CHECKING ACCOUNT
Paper checks cost a lot of money to produce and
transport to consumers and can be interrupted by weather
and other events. For example, on September 11, 2001,
the dispersion of checks that depended on air
transportation came to a complete standstill after the
terrorist attacks.
The option for consumers to utilize electronic payments
has been around for a long time. Only recently has the
Federal Reserve made a more concerted effort towards the
electronic conversion of checks. As a result, consumers
are getting charged more than ever before for their
checking accounts.
Combine that with the cost of debit card transactions
and automated tellers, it can be difficult keeping tabs
on how much money is actually in your account. This
typically will result in overdrafts, especially for
people that live paycheck to paycheck.
Below are the basic methods money is taken out of your
checking account:
Paper check
According to the Federal Reserve, paper check
use is declining. However, over $50 million in payments
annually are as a result of checks. The path of a
typical check is one that covers the country by common
land and/or air carriers until it reaches its
destination bank and is either stored or returned back
to you.
Check conversion
When you make a payment in a store via check, it is
usually converted into an electronic payment. The check
information is collected and a one-time debit is
deducted from your account. When finished at the store,
the check will be swiped through a machine, voided and
returned back to you. This is called a point-of-purchase
transaction. If you mail a check in and it is converted
electronically, an image is generated and the check is
destroyed. This type of electronic debit is called an
'accounts receivable conversion', or ARC.
Direct payment
This type of payment if for recurring bills like an auto
loan, mortgage and/or utility bill. It is also commonly
used as a means for routine payments into your savings
account. The set-up is a one-time occurrence with
payments being deducted automatically. Payments will
continue to occur as long as you grant the authority.
You will likely see these type of payments noted on your
bank statement as an ACH payment.
Debit card
Debit card use has become very popular. In fact, they
have made the greatest gains in terms of the number of
transactions -- from 8.5 billion in 2000 to 16 billion
in 2003. In contrast, credit card use grew at the most
incremental rate over the same time frame. Debit cards
are typically used to get cash from bank machines, ATMs,
via a PIN (personal identification number) but can also
be used similarly to a credit card. The fee for making
debit card purchases is the same as the cost of using an
ATM.
ATM
Used to transfer money between accounts and make cash
withdrawals.
**Get more info about
checking accounts.
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